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eCommerce the mistake of opening an online grocery store

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Aug 10, 2021 12:02:13 PM
eCommerce the mistake of opening an online grocery store

Digital transformation is something that has been talked about in recent years, it is the adoption of new technologies in the different areas of a company to change the way it operates. It aims to optimize processes, improve competitiveness and offer added value to customers. 

Despite the great benefits it was seen as a medium term project, but clearly the pandemic came to accelerate the adoption process, this made companies go headlong into launching B2C eCommerce platforms thinking that this was the solution, which was a big mistake. 

Today, in our role as consultants, we are seeing many companies taking the decision to close those efforts, the reason is very simple, they did not make a strategic process to define the actions to be taken, they simply let themselves be carried away by the heat of the moment and the trend that others were following.

Before undertaking a process of change in business strategy, it is important to sit down and analyze the business model to define the route to follow, why?

  • Many of the companies that launched B2C efforts during the last year, are companies that in reality their revenues come from B2B sources.
  • If my sales are B2B I clearly do not know how to handle B2C.

Launching into B2C sales leads companies to make the mistake of creating what I call a virtual grocery store, they simply set up a website where they drip the product catalogue, which generates two situations:

  1. It creates a problem with the modern channel and the traditional channel, as we are putting them in direct competition.
  2. It is not going to generate the expected sales, as we are not generating any value, this will make the end consumer prefer to buy my products on the digital platforms of my modern channel because they will find a wider range of products there.

Clearly after a few months these situations will make you come to the conclusion that you want to close your B2C eCommerce.

So what can I do? You may be asking yourself.

The first thing to do is to ask yourself these questions: 

What is B2C and what is B2B?

  • B2C is the online sale of products or services from a business to the end consumer.
  • B2B is business-to-business e-commerce, the sale of goods or services between businesses through an online sales portal.

Where do my sales come from today? If more than 90% is from sales to other companies (B2B), then a B2C eCommerce is not the answer, unless you want to generate a channel that allows me to have contact with the end consumer, where I can generate a differentiated value proposition and support my other channels.

If my sales come from B2B, is there an opportunity to optimize and increase routes? If the answer is yes, then what your company needs is a B2B eCommerce. If my sales come from B2B, is there an opportunity to optimize and increase routes? If the answer is yes, then what your company needs is a B2B eCommerce.

Having this clear, understanding that my sales come from B2B and if I see an opportunity in B2C to generate closeness with the end consumer and support my other channels, then the strategy to follow is to implement both.

The next step is to work on the analysis of B2C and B2B eCommerce.

The analysis to be carried out for B2C eCommerce should be based on defining the business model and the value proposition, the business model is defined as that which describes the basis on which a company creates, provides and captures value, while the value proposition is defined as that differentiator. 

In other words, it is to create a differentiated offer where we will be able to offer the end customer things that he will not be able to find elsewhere, which will allow us to generate sales.

On the other hand, the B2C channel will become a support to the modern and traditional channels, especially for product innovations and new launches, because as you know it normally takes weeks or even months to get one of these to a shelf, but having my own channel I can have it at the consumer's hand immediately and this will then accelerate the purchase of the product in the other channels.

In the case of B2B eCommerce, it is an analysis from a numerical and logistical point of view, it should be based on how much I want to increase my sales and optimise my costs, why?

  1. Replace routes: I can replace salesmen and optimise routes, the customer can self-manage their orders online, in the end it is only necessary to optimise distribution.
  2. New customers: by not being limited to vendors and / or routers we can increase our coverage areas.
  3. Increase sales: new customers are generated in two ways and a B2B eCommerce allows to improve the management of customers which translates into an increase in the average ticket.
  4. Cost reduction

Defined how to handle the B2C and B2B eCommerce model, the final piece of the puzzle is the platform, for this I need a platform that allows to handle both, as they have very different characteristics, in the market there are very few tools with those capabilities and in fact according to Gartner & Forrester the best is Magento Commerce part of the Abode suite, a leading cloud commerce platform for merchants and brands in the B2C and B2B industries, which has a robust portfolio of cloud-based omni-channel solutions that enable merchants to successfully integrate digital shopping and physical experiences.

To learn more, we invite you to schedule a demo.

Or if you want to learn about some success stories of companies that have implemented B2C and B2B models we invite you to download this ebook. 

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